Important Transaction Disclosures

1. “Take over payments” is not a legal structure

The phrase can refer to very different transactions, including a lender-approved assumption, a purchase in which title is taken subject to existing debt, seller financing, a wraparound arrangement, or another written structure. Each creates different rights, obligations, disclosures, and risks. Ask the closing professional and your lawyer to identify the exact structure.

2. Assumption requires more than making payments

The Consumer Financial Protection Bureau explains that, if a loan allows assumptions, a buyer may be allowed to take it over on existing terms, while most loans do not allow assumptions. Under federal Regulation Z, an assumption for disclosure purposes generally involves the creditor’s express written acceptance of the new consumer as a primary obligor. A private promise to make another person’s payment is not the same as lender approval.

3. The original borrower may remain liable

Unless the lender provides an effective written release, the seller may remain personally obligated under the note even after title transfers. The loan may continue appearing on the seller’s credit, can affect borrowing capacity, and can expose the seller to late-payment or default consequences. Only the lender can grant the lender’s release. Do not infer release from a deed, purchase contract, payment authorization, or buyer promise.

4. Due-on-sale risk

12 U.S.C. § 1701j-3 defines a due-on-sale clause as a provision allowing the lender, at its option, to declare secured sums due after an unconsented sale or transfer. Federal law generally allows enforcement, subject to specific exceptions. An ordinary investor purchase should not be advertised as automatically exempt. If exercised, the lender may demand full payoff, which can create refinance, resale, or foreclosure risk.

5. Payment and credit risk

If the old loan remains in the seller’s name, missed or late payments can harm the seller even when the buyer agreed to pay. Written safeguards may reduce—not eliminate—this risk. Consider independent third-party servicing, seller access to payment verification, reserves, notices, cure periods, restrictions on further transfer or borrowing, and enforceable remedies reviewed under state law.

6. Insurance, taxes, escrow, and occupancy

A transfer, vacancy, rental use, or change in insured interests can affect coverage. The carrier and closing professionals should address the policy, named insureds, additional interests, occupancy, premium, claims, and lender requirements. Escrow shortages, tax increases, force-placed insurance, HOA charges, and special assessments can change the true monthly obligation.

7. Title, liens, and closing

Use an appropriate title company, escrow provider, or closing attorney. The review should identify ownership, mortgages, tax liens, judgments, HOA claims, probate or divorce interests, bankruptcy, solar or improvement liens, leases, and other title exceptions. Funds and documents should move through the professional closing process. The CFPB’s Closing Disclosure rule expressly includes a line for existing loans “assumed or taken subject to,” but the applicable disclosure and closing requirements depend on the transaction. See 12 C.F.R. § 1026.38.

8. No automatic payoff, refinance, profit, or appreciation

Future refinancing, resale, appreciation, rent, insurance availability, and buyer performance are uncertain. Do not rely on an oral promise that the loan “will be refinanced soon” or paid by a particular date. Any contractual payoff or balloon obligation, if appropriate, should be specific and independently reviewed, but even a contract cannot make future financing guaranteed.

9. Foreclosure and financial hardship

We are not a foreclosure-rescue service and cannot modify your loan. A submission does not pause an auction or legal deadline. Continue contacting the servicer and consider an attorney and HUD-approved housing counselor. Other options may include reinstatement, forbearance, modification, repayment plan, traditional sale, short sale, deed in lieu, bankruptcy advice, or other state-specific relief. Eligibility and consequences vary.

10. Partner and investor role

We may purchase directly, use affiliated or unaffiliated acquisition partners, or assign a contractual interest when lawful and disclosed. A partner may earn money from acquisition, assignment, financing, rent, management, or resale. Seller proceeds and every fee or credit should appear in the signed documents and closing statement. We do not represent the seller as an agent or fiduciary unless a separate written agreement expressly says otherwise.

11. Independent advice and voluntary decision

Obtain your own legal, tax, insurance, credit, and financial advice. Choose advisers who do not depend on the buyer for compensation. Read the complete documents, ask for changes in writing, keep copies, and do not sign blanks. If you do not understand who remains liable, how payments are verified, what the lender can do, or what happens after default, do not sign until you do.

This page is a disclosure standard, not a substitute for counsel.

Property law and consumer protections vary. Any final transaction must be evaluated for the state, parties, loan, property, and documents involved.